Lecture 9: Health Care Systems

Ronald F. White, Ph.D.
Professor of Philosophy
College of Mount St. Joseph
National Health Care Systems
What is the “Ideal National Health Care System?”
• A formal principle or abstraction
Access to what?
» Wants v. Needs
• What is “Good Health Care?”
Individual v. Collective Measures
• Quality of what?
Health care professionals, hospitals, drugs, biomedical technologies, laboratories, research institutions, medical schools, health
• Quality Sensitivity
Availability of qualitative information
Ability to act on qualitative information
• Quality as Comprehensiveness
Number of products and services available
Health Care Needs v. Wants
• Scientific Medicine
Regulation of Research
• What is “Affordable Health Care”
How much does it cost?
How much is too much?
• Who Benefits and Who Pays the Cost?
The U.S. Health Care System
In 2005, the Census Bureau reported that at least 44.8 million Americans were without health
insurance coverage.
By 2006, that number rose to 47 million: a 15% increase in the number of uninsured.
Since, 2000 the number of uninsured Americans has grown by 8.6 million: an increase of about 22 percent.
(Census Bureau 18).
The largest segments of uninsured are employed, young adults 19-29 and older adults 45-64. (Census Bureau,
The uninsured rate among young adults, signals a corresponding rise in the number of uninsured young
Global Measurement of Quality
Life Expectancy : As of 2006 U.S. Ranks 38 th COMPARED TO: 1. Japan (82.6), 2. Hong Kong (82.6), 3. Iceland (81.8)
Infant Mortality: As of 2006 U.S. ranks 32 nd (6.3) COMPARED TO: 1. Iceland (2.9), 2. Singapore (2.9) , Japan (3.2)
Medical Mistakes
Hamilton County, Ohio 13.9 (More than twice the National Average)
Number and Quality of Products and Services
Heroic Medicine and Enhancement
Quality of Insurance Products
In 2007, the Kaiser Family Foundation reported that the cost of providing health care in the United States has
grown from 7.2% of the nation’s economy in 1970 (or $356 per person per year), to about 16% in 2005 (or
$6,500 per person).
This is nearly twice the cost of providing care in Canada ($3,161), France ($3,191.) and Australia ($3,128.); and
more twice as much as Japan ($2,358) and the United Kingdom ($2,560.).
• Economic Reality
– Cost of Healthcare– Healthcare as Social Construction
• What is disease?
– Socialized Medicine Inefficiencies
• Reliance on experts
• Determination of a social minimum: what is basic healthcare?
– Wants become needs
• Moral Hazard-Overuse of the System
• Weak on Research– Free Riders on U.S. Research
– Market-Based Inefficiencies
Imperfect Information- ”learned intermediaries”
Imperfect FreedomImperfect CompetitionFree Riders- no health insurance
Emphasis on Disease rather than health
– Weak on preventative medicine
• Real World Systems: Mixed Systems
• Emphasize Comprehensiveness (Free Market)
– Healthcare is a Business: Free Market
Maximize Private Enterprise
Minimize Public Enterprise
Maximize Private Charity
Maximize Innovation
• Maximize Competition– Regulate Monopolies:
» Natural Monopolies
» Artificial Monopolies
– Licensure, Patents, etc
• Emphasize Universality (Socialized Medicine)
– Healthcare is a Public Good
• Marxism
• Welfare Liberalism
– Social Minimum
» Safety Net (needs v. wants)
Beveridge Model
• William Beveridge (England)
• Great Britain, Italy, Spain, Scandinavia, Cuba, and Hong
• Health Care financed and provided by government via
– No medical bills, public service
– Most doctors are government employees
– Most doctors are private doctors collect fees from govt.
• U.S. Correlate:
• Military and Veterans, Indian Health Service
• Problems: High Taxation, Shortage of Specialists, Waiting
Lines, Patients may not be treated if the doctor deems
unimportant, Government (not price) rations health care
National Health Insurance Model
• Canadian System
– Canada, Taiwan, South Korea
– Single-Payer System
– Principles Governing Canadian System
Public Administration
– U.S. Correlate: (Medicare)
• Individuals over 65
– Basic Problems: Waiting Lines, High Taxes
Bismarck Model
– Germany, Japan, France, Belgium, Switzerland, Japan
• Otto Von Bismarck (Germany)
– Universal Coverage
– Providers and Payers are Private
– Insurance Financed by Employers and Employees
• Non-Profit Sickness Insurance Funds
• Individual and Employer Mandates
• Price controls on medical services
– U.S. Correlate: Four-Party System
• Most working individuals under 65
– Basic Problems:
Sickness Funds run out of money
Doctors not highly compensated
Perverse Incentives: Job-Lock, Job-Flight
Out-of-Pocket System
• Countries without any Organized Health Care System
– Somalia, Afghanistan etc.
• Products and Services not covered by Countries with Health Care
– Treatments that address wants (elective v. necessary treatments)
• Cosmetic surgery, Sex change, weight reduction surgery etc.
– Treatments with marginal cost-benefit ratios
• Joint replacement surgery
– Dental care, psychiatric care, pharmaceuticals
– Illegal Treatments on the black market (Rhino Horn etc.)
• The United States
Unemployed or Underemployed
Uninsured with pre-existing conditions
Exceed Lifetime Insurance Limits
• Contractual Exclusions
• Problems: Access to health care by the poor, inequality of quality
(the rich get better care).
Health Care
Systems in the United
• Decentralized Mixed System Based on Groups
• Four-Party System (workers)
– Bismarck Model
• Multiple Systems
– Federal Employees Health Benefit Program (employees of
– Medicare (elderly)
– Beveridge Model
– Medicaid (poor)
– National Health Insurance Model
– Veteran’s Medicine (veterans)
– Beveridge Model
– State Children’s Health Insurance Program (SCHIP)
– National Health Insurance Model
– Reauthorized in 2009
– Cobra Consolidated Budget Reconciliation Act COBRA (unemployed)
Questions for Discussion
• Why are all national health care systems
always subject to “reform?”
• Are comparisons between the U.S. health
care systems and European systems fair?
• Why do all health care systems struggle
with the conflict between “market justice”
and “social justice?”